New Home Lending Falls 15% in Quarter

Investor activity dropped 30% in the September quarter as Labor's tax changes take effect.

Updated on Nov. 11, 2026 in Residential

Isometric editorial illustration of a bare timber house frame on an empty concrete slab under flat overcast light, evoking the new-build housing that the tax changes affect. — New home lending fell 15 per cent in the September quarter as investor activity dropped 30 per cent after Labor's negative gearing and capital gains tax changes took effect. AI Illustration. Upload story photo >

Live Poll

Do you think housing is getting more or less affordable in Australia?

New home lending fell 15 per cent in the September quarter, while property investor activity fell 30 per cent over the same period. The decline follows Labor's negative gearing and capital gains tax changes announced in the May 2026 budget.

Why it matters

The fall in investor activity is being shaped by more than borrowing costs, including the tax changes and expectations of lower house prices. The Coalition and One Nation have both vowed to dump the changes, leaving the policy's future uncertain.

Owner-occupier lending fell 10.4 per cent in Queensland, 6.6 per cent in Victoria and 4.1 per cent in New South Wales over the quarter. The source does not separate the effect of tax changes from borrowing costs and price expectations.

The players

Labor

The Australian Labor Party, the federal government that introduced the negative gearing and capital gains tax changes.

The details

Labor's negative gearing changes restrict the concession to new builds and properties purchased before budget night. Its capital gains tax changes replace the 50 per cent discount with an inflation-adjusted model carrying a minimum 30 per cent tax.

May 2026: Labor announced the tax changes in the budget.
Previous three months: Owner-occupied loans fell four per cent.
September quarter 2026: New home lending and investor activity fell.

Roadmap

The fall in investor lending is the first measurable market response to Labor's May 2026 budget tax changes. Whether the decline persists depends on the Coalition and One Nation following through on their pledges to reverse them.

Prospective owner-occupiers may face a more competitive market as investor demand softens. Investors affected by the negative gearing and capital gains changes should review their holdings against the new rules.

The takeaway

Policy uncertainty is already reshaping the housing market, so buyers and investors should track both the tax rules and the political response before committing.